Techdirt. Stories filed under "fines"

Jealous Of Copyright Trolls, Entertainment Industry Looks To Move Three Strikes From 'Disconnect' To 'Fines'

Mike Masnick — Tue, 12 Feb 2013 07:45:54 PST

We were just talking about how three strikes hasn't done anything to actually increase sales. Instead, as many, many people predicted, sales have continued to decline. Of course, perhaps treating your biggest fans as criminals is not a particularly wise strategy. But, then again, the big entertainment legacy players aren't exactly known for wise or thoughtful strategies.

With France, the biggest supporters of a "three strikes (accusations) and we kick you off the internet" plan facing pushback from the government, it appears that the industry folks have hit on their latest ridiculous strategy. Rather than kick people off the internet, why not take a page from copyright trolls, and force them to cough up money. Yes, indeed, it appears that the entertainment industry is looking to turn "piracy" into a "business model" by forcing people they accuse (not convict) of infringement to pay up in large masses. Except, rather than using shady dealings via questionable court procedures, they're just hoping to roll it into existing three strikes plans:

UPFI, (Union of Independent Phonographic Producers), said that it agreed with the opinion of French music rights group SACEM that a disconnection regime should be replaced with warnings along with fines of 140 euros.

PCInpact contacted Jerome Roger, Director General of UPFI, who confirmed the group is indeed in favor of such fines.

This leaning towards cash penalties is also endorsed by Warner Music President Thierry Chassagne. In recent comments Chassange suggested that not enough punishments have been handed out under Hadopi and that a deterrent is necessary.

In other words, if kicking people off the internet isn't getting them to give us more money... how about we skip that middle step and just force them to give us money. It is, clearly, taking a page straight out of the copyright trolling handbook.

According to French publication Numerama, this new direction is basically a done deal in France. And, of course, once it shows up there, expect the same sort of things to start popping up around the globe quickly. The industry doesn't spring stuff like this in just one place alone. There's a global strategy behind it.

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Panama Considering Legislation That Allows The Copyright Office To Pursue Filesharers Directly -- And Keep All The Fines

Tim Cushing — Fri, 21 Sep 2012 07:16:02 PDT

From SOPA/PIPA to the Digital Economy Act to ACTA to the DMCA, there's no shortage of bad legislation built to serve various copyright-driven industries. But just when you thought you'd seen the very edge of how far legislators were willing to go, someone comes along and tops it.

Technollama brings news that Panama is attempting to raise/lower the "bad legislation" bar (not sure which direction the bar would actually be traveling...) with its Proyecto 510-2012 bill, dealing with copyright and related rights.

The 510 Bill gives new powers to an administrative branch of the Ministry of Commerce and Industry called the General Copyright Directorate (Dirección General de Derecho de Autor, henceforth DGDA). Unlike similar copyright administrative offices around the world, the DGDA will have the power to impose fines on infringers without prejudice of further criminal or civil actions.

It's exactly what it looks like: the Panamanian copyright office is being given the power to chase down filesharers and fine them up to $100,000 PAB ($100,000 USD). In addition, the "without prejudice" portion means that filesharers can still be pursued by rights holders, even if the government has already levied a fine.

The bill goes even further than this astounding bit of rent-seeking:

[T]he DGDA has the power to unilaterally haul any alleged infringer, ask them to mount a defence within 15 days, impose fines of up to $100k USD ($200k for re-offenders), and on top of that this person may still have another civil case against them added to the administrative fine. Adding insult to injury, they also have to pay for the publication of the fine so that everyone knows what a nasty pirate they are.

So, you have a government entity pursuing citizens for copyright infringement (a civil matter, or so it used to be...), an act which opens them up to further civil action from the rightsholders. With this kind of enforcement, the Panamanian creative industries should be rolling in extracted filesharer dough. Or so you would think, if this bit of wording wasn't present in the bill:

The funds accrued by the General Copyright Directorate from the fees for the services it provides and the fines imposed in the exercise of its powers, will be aimed at improving its operational infrastructure and to boost the performance of its officers, complementary to the funds that the State Budget reserves for the operation of the entity[...]. The amounts corresponding to each official, shall not exceed fifty percent (50%) of the total basic salary monthly remuneration.

That's right, none of it goes back to the rightsholders. These fines get fed right back into the system that levied them. Not even back into the government in general, but directly back to the DGDA. Wow. How could that possibly be abused?

This is what I think will happen if the law passes as it stands. The DGDA will immediately try to monitor all torrent use in Panama, be it legitimate or not, and all people identified with IP addresses will be summoned and summarily fined. After all, the institution and its employees will have a direct financial incentive to assume guilt. Then those same people will be sent again and again, as there will be clear incentive to fine re-offenders.

Well, that's sounds like all the fun of copyright trolls combined with the "answer to no one" power of the government all rolled up into big ball of perverse incentives. I suppose the government will turn these filesharers over to the rightsholders once it's drained them of money to toy with the drained corpse through civil proceedings.

Meanwhile, the industries seeking this sort of protection will find that no one has any money left to purchase their products, much less pay off another set of hefty fees. While this may provide the rightsholders with some sort of second-hand vindictive high, it's hard to see how this betters their financial situation in the least.

Technollama calls the legislation "toxic." It is. And more than that, it's completely perverse in every sense of the word. It hooks an agency up to an IV full of money and trusts it not to repeatedly press the "dispense" button. Sure, it may cut down on infringement, but once a government agency is hooked on steady income, it usually comes up with new (and worse) ways to keep the buzz going. The dollar amount of the fines will be ratcheted up and the definition of "infringing activity" will become broader, perhaps encompassing such maximalist wet dreams as embedded video. It's ugly, any way you slice it.

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Anti-Piracy Song Pirated By Anti-Piracy Group; Collection Society Fined For Failing To Get Royalties

Mike Masnick — Wed, 18 Jul 2012 07:18:48 PDT

Well, this is confusing. A few months ago, we wrote about how a composer, Melchior Rietveldt, was in a weird situation in which the song he wrote for a Dutch anti-piracy effort was showing up on DVD anti-piracy ads -- even though his contract quite specifically limited the use of the work to a local film festival. When he discovered that his song was all over some top selling DVDs (including Harry Potter) he sought compensation, going to local music collection society Buma/Stemra, asking them to get the $1.3 million he believed he was owed. Buma/Stemra initially ignored him, and then there was a weird situation in which a Buma/Stemra board member tried to offer to "help" Rietveldt, with some questionable conditions attached, including getting a cut of the money owed.

Apparently, the latest in the case is that Buma/Stemra has now been told to pay Rietveldt €20,000 and attorneys' fees -- and to continue its efforts to get him the royalties actually owed. And yes, this seems a bit confusing. Remember, it was the anti-piracy group and the movie studios who appeared to violate his copyright (yes, on his anti-piracy song). Buma/Strema's job was supposed to be to collect the money. So how is it that they're now the ones being fined? It appears some of it becomes a contractual issue in which Buma/Strema promised to try to collect the fees owed, but apparently didn't do enough after it decided it would be too much work to actually track down those who used the song. The judge in the case noted that, at the very least, Buma/Strema had a duty to inform Rietveldt that it had given up after promising otherwise. Either way, the end result is that the collection society now owes Rietveldt more money and has to continue trying to collect even more. All over an anti-piracy song that was pirated by anti-piracy groups (mainly NVPI, who is apparently the parent group for the well-known anti-piracy organization BREIN).

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China Increases The Fines For Copyright Infringement

Mike Masnick — Wed, 6 Jun 2012 20:30:00 PDT

For years, we've discussed how the US has put all sorts of pressure on China to boost its intellectual property enforcement regime -- and each time we warn that this is going to backfire in a big, bad way. To "appease" the US, China keeps ratcheting up its enforcement... but seems to have a habit of doing so in ways that hurt foreign companies. And, even though China declared its supposed copyright crackdown a "success," under increasing pressure to change its IP laws, China has announced plans to double the "fines" for infringement up to 1 million yuan (~$158,000). That seems perfectly in line with the ridiculous statutory rates currently found in the US, but seems even more out of place in China where the average citizen makes a lot less than the average American. Not that there's likely to be much of an effort to use such a law, but laws like these don't get people to respect copyright more. They do the opposite. When the penalties are so out of proportion to the action, no one takes the law seriously.

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DailyDirt: On The Way, The Paper Bag Was On My Knee...

Michael Ho — Mon, 28 Nov 2011 17:00:00 PST

There doesn't seem to be a "Black Friday" for getting good deals on booking flights. Maybe there is a single day of the year to buy really discounted plane tickets -- if you know what day that is, please let everyone know in the comments. But technically, it probably takes more than a single day of ticket sales for the airline industry to get into the black for the year. In any case, here are some more stories about airlines and how they treat their customers.

Spirit Airlines tweeted about a $9 ticket deal, but neglected to mention the fees and taxes -- resulting in a $50,000 fine for the airline. Beware what you tweet, airline marketing folks. [url]
A guy from Chicago is suing Southwest Airlines for canceling his free drink coupons before he got to use them. He says Southwest owes him 45 free alcoholic drinks, and he's looking for other flyers who didn't get their free drinks to join him in a class action suit. [url]
David Phillips will always be remembered by bargain hunters for turning about $3,000 worth of pudding into 1.2 million frequent flier miles. For every 10 UPC codes he collected, he earned 500-1,000 miles on American Airlines. [url]
Virgin America CEO David Cush tells it like it is when asked about who came up with a good idea. "This was designed before my time but as I tell people, as time goes on and memories fade it will become my idea." [url]
To discover more interesting business-related content, check out what the deal is on StumbleUpon. [url]

By the way, StumbleUpon can recommend some good Techdirt articles, too.

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Egypt's Ex-Pres Mubarak Fined Millions For Cutting Off The Internet

Mike Masnick — Thu, 2 Jun 2011 05:54:08 PDT

Remember when Egypt wasn't quite sure how to deal with protests in the streets, and the government decided the best course of action was to cut off the internet (because nothing attracts the travel business like a capricious and arbitrary government, running around like crazy, just because citizens start speaking up). However, then President Hosni Mubarak probably should have thought twice before hitting the kill switch. Apparently he (along with two other officials) has been fined something close to $34 million for shutting down the internet:

The court ruled that Mubarak, Nazif and Adli were guilty of "causing damage to the national economy" and the fines would be paid to the country's treasury.

Who knew it was illegal to do that?

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Julian Assange Doesn't Do Irony Well: Threatens His Own Internal Leakers With $20 Million Penalty

Mike Masnick — Fri, 13 May 2011 03:59:11 PDT

It's no secret that Wikileaks' Julian Assange is a man of many contradictions, who has what appears to be a vindictive and angry streak against those who disagree with him on certain plans. However, now reports are coming out that he made his own associates sign an incredibly draconian non-disclosure agreement which threatens anyone who leaks documents from within Wikileaks with the potential for a $20 million penalty. I guess, you could argue that since he recognizes how much leaking goes on, that it makes sense to put in place extreme penalties. Of course, the alternative explanation that many seem to prefer is that he's just annoying, paranoid and, at times, more than a bit hypocritical.

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Swedish Court Fines File Sharer About $300 For Sharing 44 Songs

Mike Masnick — Mon, 21 Feb 2011 11:51:48 PST

While US courts have been awarding tens of thousands of dollars per song for the few people found guilty of unauthorized file sharing, many people have noted how utterly ridiculous those awards are, in comparison to any actual harm. It appears that a court over in Sweden appears to agree. A man who was charged with sharing 44 songs has been fined a much smaller amount, specifically, 2,000 kronor, or about $300. It actually comes out to just about $7 per song.

It will be interesting to see how the industry reacts to this one. After all, they've been going around praising the IPRED anti-piracy law in Sweden for the last two years now. Will we suddenly start hearing about how Sweden "doesn't take piracy seriously" and then there will be a new push for even stricter laws?

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Mysterious Non-Company 'Helping' ACS:Law Collect Fines Now Says Forget The Whole Thing

Mike Masnick — Mon, 24 Jan 2011 15:04:33 PST

As ACS:Law's legal mistakes mount, there was a recent story about how the company had passed on some collections efforts to a firm called GCB, but the details suggested another total screwup. People tracked GCB back to an accounting firm, which quickly put on their website that while GCB was formed by it, it "appears to be being misused by some third party," and that it was "taking urgent steps" to end this. The details suggested some odd maneuverings:

When PC Pro spoke to McLean Reid partner John Champion, he told us that GCB had been registered at that address on behalf of one his clients, David Fisher.

Champion said that Fisher had lent his dormant company to an associate, who had been collecting the file-sharing money without his knowledge. "He just decided to help a friend out," Champion said. "He wanted a dormant company, and he said 'Oh I've got one that's not doing anything, you can have that'."

"I know Dave Fisher is put down as a director [of GCB], [but] this activity was done without him knowing what activity was happening," Champion added. "I think he's taking steps to make sure all that money's been repaid."

The "friend"? Yeah, according to PCPro, it turns out that it was Andrew Crossley, the guy from ACS:Law. Either way, it seems that all this attention has scared Fisher off. An anonymous tipster alerts us to the news that if you call the phone number that GCB tells you to call to pay up, you get the following message:

"If you have received a letter from GCB Ltd please disregard this letter as GCB is no longer pursuing the matter stated in the letter."

Seems like Crossley and ACS:Law are going to have to try the next option.

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California Continues Protecting Hollywood: Imposes Greater Fines On Infringement Based On Faulty Reasoning

Mike Masnick — Wed, 12 Jan 2011 15:50:00 PST

Paul Keating sent this one over a few weeks back, but just got around to going through the details. It appears that, as of January 1st, California (rather quietly) greatly increased (mostly doubled) the fines for "piracy" and "counterfeiting," while expanding the definitions of what qualifies for these new fines, by passing two laws (pdf) late last year, based on questionable reasoning:

According to its provisions, AB 819 was intended to increase the state's tax base and stimulate the economy by safeguarding the legitimate sale of intellectual property, and to send a strong signal that California is committed to protecting the intellectual property created by innovation and entertainment industries in the state.

In other words, here's a gift to Hollywood so that it will pay more taxes. As for the specific reasoning behind these bills, it gets more laughable the deeper you dig into the specific text of the bill which is summarized in the document above. However, let's go through the full findings:

(a) According to a 2007 study by the Institute for Policy Innovation, intellectual property piracy, meaning the theft of movies, music, software, and video games, costs the United States economy $58,000,000,000 each year.

This one is just sad. The IPI's "methodology" for calculating such numbers has been debunked over and over and over again -- most thoroughly by Tim Lee years ago, in which he highlighted how their methodology involved double, triple, quadruple counting of the same exact dollars to come up with their ridiculous sums. Of course, rather than improve their methodology, IPI's response was to try to get Tim fired from his job. That the State of California would base significant legal changes on such a methodology is downright scary.

(b) The problem of intellectual property piracy continues to grow worse. A 2005 Gallup study found that 5 percent of Americans had purchased, copied, or downloaded counterfeit music in the preceding year. By 2007, this number had jumped to 9 percent. The percentage of respondents that admitted buying a pirated movie rose from 3 percent in 2005, to 6 percent in 2007. At the same time, once robust DVD sales have flattened over the past few years, while CD shipments to retailers have plummeted.

Correlation is not causastion. Doesn't anyone in politics know this?

(c) The effect of intellectual property piracy on California and its citizens is particularly dire. Intellectual property piracy adversely affects the California economy, eliminates jobs, and damages industry. According to the Business Software Alliance, in 2003, software piracy alone cost the California economy more than 13,000 jobs, over $802,000,000 in wages and salaries, over $1,000,000,000 in retail sales of business software applications, and roughly $239,000,000 in total tax losses.

The BSA's numbers are even more ridiculous than the IPI's and have been debunked over and over again. Even the company that put together the numbers for the BSA had admitted that the BSA clearly exaggerates what they mean. For example, the BSA still insists on using a 1:1 unauthorized copy = lost sale argument, which anyone with an ounce of common sense knows is laughable.

These are the kinds of stats that the GAO had specifically warned governments not to believe. So why are California politicians believing them?

(d) Intellectual property piracy poses a significant threat to consumers, who, through no fault of their own, are often deceived or deliberately misled, or both deceived and deliberately misled, as to the nature of purchased products, whereby pirated goods are palmed off, including in electronic form, as legitimate authorized goods.

Citation needed. Seriously. A major citation is needed here, because the studies we've seen suggest something quite different. They suggest that, quite rarely are consumers confused. In fact, multiple studies have shown that counterfeiting usually isn't a problem, because people know what they're buying, know they're fake, and often use them as incentive to save up for the real version later. Furthermore, many other studies have shown that the actual impact of counterfeiting is a tiny fraction of what the industry claims.

(e) A growing number of criminal organizations worldwide are involved in intellectual property piracy.

This is both questionable and misleading. This claim has been tossed around for years with little in the way of actual evidence to back it up. Yes, there are some organized crime groups involved in counterfeiting operations, but most of this bill is about infringement of digital goods. This is an attempt to conflate the two issues since the actual reasons for such a legal change is so incredibly weak.

(f) This act will send a strong signal that California is committed to protecting the intellectual property created by California's innovation and entertainment industries.

(g) Finally, by safeguarding the legitimate sale of intellectual property, California will increase its tax base, and stimulate the economy.

That one sort of speaks for itself. Basically, here's a bill designed as a favor to our friends in Hollywood. As for the claims that it protects the tax base, that's also been debunked, as it's been shown that such infringement almost certainly helps other industries at a much greater rate -- and those industries pay more in taxes. Plus, all the money not spent on these things doesn't just disappear, but still is spent in the economy (and taxes are paid on it).

It's pretty sad to see California passing laws like this based on such ridiculously bad and debunked evidence.

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Guy Agrees To Pay $250,000* Just Days After Being Sued For Uploading Movies

Mike Masnick — Mon, 10 Jan 2011 19:07:00 PST

TorrentFreak notes that a guy who was apparently sued for uploading some porn movies from Liberty Media agreed to settle the lawsuit just four days later with a settlement that claims he'll pay $250,000. What's odd, of course, is that seems like a rather large settlement -- especially done so fast, with no apparently legal fight. However, TorrentFreak noted a little semi-hidden caveat in the consent agreement:

Defendant has an opportunity to reduce the amount payable to Plaintiff if Defendant ceases any further content theft (whether the Plaintiff�s content or anyone elses), and if he makes regular payments toward the judgment on a schedule which will be agreed upon between the parties in a separate settlement agreement.

Reading between the lines, it seems likely that the company and the guy worked out a much lower actual settlement amount, and basically the guy is really paying that. But this way, if he's found to infringe again, it'll jump up to $250,000. In the meantime, though, it gives Liberty Media the ability to claim it got a $250,000 settlement, even though it's unlikely to actually be anywhere near there.

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How The FCC Got Millions To See Charlotte Ross's Naked Behind... And Then Lost In Court

Mike Masnick — Wed, 5 Jan 2011 12:03:29 PST

We had just discussed how two separate appeals courts were trying to determine whether or not the FCC's indecency fines over "fleeting nudity" on TV were legal. The case involving Janet Jackson's "wardrobe malfunction" is just beginning, but the other case, involving Charlotte Ross's bare behind being shown on NYPD Blue has now concluded with the (not surprising) decision to toss out the $1.43 million fine the FCC issued against ABC. This wasn't all that surprising, given that the courts had already struck down FCC fines over "fleeting expletives," and had suggested that fleeting nudity would fall under the same analysis. Even the FCC had admitted that under the ruling concerning "fleeting expletives," the NYPD Blue fine was probably a goner. It's still appealing the original ruling about fleeting expletives, however, so it's not over yet.

Of course, the history of almost all of these cases all tracks back to the infamous Parents Television Council (PTC), the group that is famous for flooding the FCC with bogus "complaints" from its members who never actually saw the content in question, but were urged on by the PTC to send complaints. We recently had noted that PTC was coming under some serious scrutiny concerning some of its more questionable practices.

However, what we still found most amusing about this particular case is the fact that when Kevin Martin (who headed the FCC when the original fine was issued) decided to pursue this fine over Charlotte Ross's nudity, all it really did was drive a tremendous amount of interest in people seeing what the clip was about. In other words, in trying to fine ABC for "indecency," the PTC and Kevin Martin helped to publicize the video, which for a while was apparently the most popular video on YouTube. And now, not only did the PTC and Kevin Martin help millions of people learn about ways to see Charlotte Ross' bare behind, but the FCC got absolutely nothing for it, given this latest ruling.

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Police End Up Paying $4k To Guy They Gave Bogus Traffic Tickets To After He Flipped Them Off

Mike Masnick — Tue, 9 Nov 2010 07:36:00 PST

It's probably not a good idea, in general, to give the middle finger to police officers you encounter in your everyday life. However, it's also not illegal. So a guy who did it twice, and each time was then pulled over and given questionable citations then sued them for violating his civil rights. The Clackamas County police department in Oregon has now agreed to pay him $4,000 to settle the lawsuit, claiming that it was just cheaper to settle than to fight. Perhaps they also realized that they were likely going to lose as well.

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Delta Fined For Lying To Passengers About How Much They Could Get Reimbursed For Lost Luggage

Mike Masnick — Tue, 2 Nov 2010 20:33:36 PDT

Consumerist alerts us to the news that the Department of Transportation has fined Delta $100,000 for telling passengers that its liability on lost luggage was capped at very low rates -- well below what the DOT specifically requires. The law says that airlines cannot limit liability to anything lower than $3,300 per passenger. So what did Delta do? It gave passengers notices saying that liability was limited to $125. Turns out, that's a no-no. Of course, I'd rather that the airline spend the money on not losing luggage, but perhaps that's just wishful thinking...

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German Teen Charged With Sharing Music Fined 30 Euros

Mike Masnick — Thu, 28 Oct 2010 22:27:59 PDT

While we're still dealing with people losing copyright lawsuits and being told to pay hundreds of thousands of dollars for sharing a handful of songs, a court in Germany has ordered a guy to pay a grand total of 30 euros ($41) for sharing two music tracks. He had been sued by the copyright holders, demanding 300 euros per track, but the court apparently decided to cut the amount down to just 5% of the rightsholders' request. Separately, the copyright holders had apparently tried to also sue the kid's father, since it was his internet connection that was being used -- but the court rejected that line of attack, quite reasonably.

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Ohio Town Refunds 980 Speed Camera Tickets For Only Driving 10mph Over The Limit (Versus 11mph)

Dennis Yang — Tue, 12 Oct 2010 16:26:52 PDT

A story suggest to us by reader Dan describes how an Ohio town recently issued 980 speeding ticket refunds. The city of Garfield Heights, Ohio, installed two speed cameras, attached to unmanned police cars, and then sent speeding tickets to those that were deemed to be speeding. The policy was to only issue tickets to those driving more than 11 miles per hour over the speed limit, so, when it was found that a number of tickets were issued to those driving 10 miles per hour over the limit, almost $100,000 in ticket revenue was refunded. Apparently, city officials had told the public that the tickets would be issued if people were caught driving 11 miles over the limit. So, if that's the case, then is the speed limit actually the speed limit or not? Once again, this goes to show how completely arbitrary speed limit enforcement can be. Is there really a difference in safety in going 10 mph over the speed limit vs. 11? And, if anything, it seems that widely circulating this policy would simply encourage people to drive 9 miles over the limit.

Clearly, it's a great money maker for the city. Since the month of June, when the cameras were installed, they sent out nearly 11,000 tickets, representing about $1,000,000 in added revenue. Sure, it's possible that the city may need to cover a shortfall in a budget, but is the false guise of public safety the appropriate manner in which to obtain this revenue? At least this method is a little more scientific than other Ohio towns, where a policeman can issue a ticket by simply guessing how fast you were going.

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Tesla Motors Pays Fine For Lacking Emissions Certificate Of Conformity... Even Though It Lacks Emissions

Mike Masnick — Tue, 31 Aug 2010 11:32:14 PDT

A few of you sent over this bizarre story of how famed electric vehicle maker Tesla Motors apparently need to pay a $275,000 fine for lacking a "Certificate of Conformity" from the EPA, needed to comply with the Clean air Act. As is noted in the article, it doesn't seem like Tesla should have to get such documentation in the first place, seeing as it doesn't even have a tailpipe, but such is the nature of regulations being a bit behind the technology times.

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UK Hairdresser Fined For Playing Music Even Though He Tried To Be Legal

Mike Masnick — Wed, 7 Jul 2010 05:54:33 PDT

We've pointed out many times just how ridiculously complex various licensing collection agencies are in the music space, especially when multiple collection societies cover the same music. The whole system seems designed to make it nearly impossible for anyone to actually play music legally. Take, for example, this situation in the UK, pointed out by reader mike allen, involving a hairdresser who had paid for a license from PRS For Music just to be allowed to turn on a radio in his shop... only to discover that he failed to pay the other UK collection society, PPL (home of the infamous CEO who insists that "for free" is a bogus concept). So even though this guy thought he was legit, he still ended up with a fine for £1,569.

In his defense, he claimed that he'd never even heard of PPL, and since he had a PRS license, he assumed (quite reasonably) that he was in the clear. Now, I'm sure that defenders of the system will quickly step up and say that it was his responsibility to find out what music licensing groups you have to hand over a tithe to each year, but all this guy wants to do is turn on his radio. For most people, it's just common sense that you shouldn't have to pay a fee just to turn on a radio in your barber shop. And then, once you're informed that this totally nonsensical situation is, in fact, true, it seems quite reasonable to then assume that one license will let you turn on the radio. Finding out that you need two (or more) separate licenses just to turn on the radio (even though the radio already pays its fees and the music acts a promotion) just seems ridiculous for everyone who isn't a recording industry exec or a long term copyright lawyer.

Copyright is not supposed to work this way.

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Brazilian Court Fines Google Yet Again Over Anonymous Orkut Message

Mike Masnick — Wed, 28 Apr 2010 00:54:00 PDT

Brazil's laws concerning liability for online posting continue to haunt Google for no good reason. For years now, we've been hearing about lawsuits against Google in Brazil because of comments made on Orkut, Google's social networking site that (for whatever reason) is mostly popular in Brazil. Brazil doesn't seem to have a concept of safe harbors or of actually applying liability to those who actually did the actions. Instead, every time that someone does something mean on Orkut, Google gets blamed and fined.

Slashdot points us to the latest such case, an appeal of an earlier ruling against Google, where, once again, the judge found that Google should have magically stopped a supposedly defamatory message from being posted:

"By making space available on virtual networking sites, in which users can post any type of message without any checks beforehand, with offensive and injurious content, and, in many cases, of unknown origin, [Google] assumes the risk of causing damage [to other people]," judge Alvimar de Avila said.

Of course, that makes no sense. Does that mean webhosts are automatically responsible for any content that people put online? Claiming that just creating a place where people can post messages means liability for the provider creates huge chilling effects. It doesn't make sense for any internet company to operate in Brazil if it has any user-generated component at all. The liability is way too high.

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Google Fined For Not Blocking Dirty Jokes

Mike Masnick — Wed, 24 Mar 2010 11:23:04 PDT

sinsi was the first of a few of you to send in the news that Google has been fined by a Brazilian court for not blocking some dirty jokes on its Orkut social network (which, for reasons no one has explained, is only popular in Brazil). This isn't the first time that Google has run into legal trouble over Orkut -- though it appears in every case that the Brazilian courts seem to blame Google for any action done by its users. Have they no safe harbors in Brazil? Do courts really not understand why it makes no sense to blame the service provider for actions of their users? Amusingly, the court even cited the fact that Google censors content in China as a reason for why it could do so in Brazil -- but left out Google's recent decision to pull out of China entirely, rather than continue to filter results.

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Now France Fines Google For Scanning French Books

Mike Masnick — Fri, 18 Dec 2009 15:35:01 PST

With France gearing up to dump another billion dollars at its own anti-Google book scanning project, it shouldn't come as much of a surprise that a French court has ruled that Google's book scanning project violates copyright law. It's also fining Google 10,000 euros per day until it removes the books in question. Better solution: just block people from French IPs from accessing Google Books.

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French Courts Continue To Penalize eBay For Actions Of Users

Mike Masnick — Mon, 30 Nov 2009 16:45:20 PST

While more and more courts seem to be understanding that eBay shouldn't be responsible for what users are selling on its site, it appears that French courts are a bit confused. Last year, a French court fined eBay $63 million because counterfeit LVMH products were being sold on the site. Of course, eBay has no way of knowing what's legit and what's not, but the French court didn't seem to care. A similar case, also involving LVMH, but concerning Google ads, was also ruled in LVMH's favor, but it was appealed to the European Court of Justice, and a judge there has already indicated that it makes little sense to blame the company. But that isn't stopping the French courts. eBay has now been fined yet again, because of a French ban on selling even legally purchased brands of LVMH perfumes if you're not an authorized distributor. eBay is appealing the ruling, saying that banning the resale of legally purchased goods doesn't make sense and harms consumers. However, a much bigger question is why eBay should be liable at all. It's not eBay doing the selling, but users on the site.

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UK Pub Owner Fined Due To Unauthorized Downloads On Free Pub WiFi?

Mike Masnick — Mon, 30 Nov 2009 06:00:00 PST

A bunch of folks have sent in the story of a nameless pub owner in the UK who has supposedly been fined £8,000 in a lawsuit brought by a copyright holder over unauthorized downloads that were done over free WiFi that the pub offered. Of course, there is a lot of missing information here, so I'm not quite sure how much to believe of this story without further evidence. The name of the pub is not given. The information was provided by a WiFi hotspot provider, The Cloud, which claims that the specific pub owner has not given permission to publicize the case. Yet, if it was a lawsuit, you would think that there would be some court records detailing this. It appears that the laws regarding safe harbors for copyright infringement are not nearly as clear as they are in the US. Under the DMCA it seems that any hotspot owner would have safe harbor protections against such a lawsuit, and it seems odd that a court would fine the pub owner when it was clearly a user of the access point that did the file sharing.

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Why Fining People Can Actually Increase That Activity... An Economics Lesson

Mike Masnick — Tue, 6 Oct 2009 12:27:00 PDT

I was recently having a discussion with a friend where I pointed out one of the biggest mistakes that people make in trying to understand economics is to assume, incorrectly, that "marginal benefit" or "marginal cost" means money. And, yes, this is actually a mistake that many economists themselves make -- and, in part, it's because the marginal benefit is often measured in monetary terms. So, people seem to think that if there isn't a monetary component it doesn't count. This makes for silly statements like "economics doesn't properly understand how people act." Almost every time that's said, when you look at the details, it's wrong. It's just that people assume that because someone does something for a non-monetary reason, economics can't account for it. That's simply not true. If people do things for a non-monetary reason, it's because they're receiving marginal benefits in some other manner, whether it's attention, pride, happiness, joy or "just because I want to." Those are all marginal benefits.

In fact, Clive Thompson points us to a study that highlights this in a really strong way. It's a series of studies that show that when people overestimate the monetary benefits (or costs) and underestimate the nonmonetary ones, they often set up really bad incentives.

For example, they've found that fewer people give blood when they're paid for it. For someone who thinks only in terms of the monetary benefits, this would make no sense. Why would giving people money lead to less of the activity. But the reasoning is that the real marginal benefit that people get from giving blood is the belief that they're doing good in the world and helping to save lives. Getting paid for it, actually hinders that feeling, by making the whole thing feel like a transaction. And the money paid is apparently a lot less than the decreased "good feelings" from the marginal benefit.

On the flip side, other experiments showed that fining people over certain actions (such as picking up their kids from daycare too late), actually increased the number of tardy parents. Again, if you think of this solely in monetary terms, this makes no sense. It now costs more, monetarily, to be late to pick up a kid. But, in making it a monetary transaction, it removed non-monetary costs -- such as the "guilt" of being late. As the article notes:

The fine seems to have reduced their ethical obligation to avoid inconveniencing the teachers and led them to think of lateness as simply a commodity they could purchase.

This is really fascinating stuff that is important for people to understand in setting up any sort of incentive structure. Money -- either on the cost or benefit side -- is not the only incentive. And thinking that it is often leads to miscalculating a series of other, potentially more important, costs and benefits. That doesn't mean that economics is wrong. It can handle all of that. The problem is when people assume that it's only the direct monetary costs and benefits that go into the equation. It is, unfortunately, a common problem, and leads to all sorts of confused thinking both about business models, but also about the economics profession itself.

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Beyond Kicking People Offline, France Raises Fines For Copyright Infringement To $440,000

Mike Masnick — Wed, 23 Sep 2009 15:23:17 PDT

With France continuing to push for a version of three strikes legislation, the latest bill approved also happens to increase potential fines for infringement up to 300,000 euros, or approximately $440,000. Nice to see governments making sure that the punishment fits the crime, huh?

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